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Microsoft Boasts Record Xbox Live MAU; Expects Holiday Gaming Revenue Drop YoY Due to Generation End

During Microsoft’s quarterly financial conference call, CEO Satya Nadella and CFO Amy Hood talked about the company’s gaming business.

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Jin_Sakai455d ago

In real news.

“Microsoft Gaming Revenue Declines 7% YoY; Xbox Content and Services Revenue Relatively Unchanged“

S2Killinit455d ago (Edited 455d ago )

MS boasting. Its what they do. Usually it corresponds with bad news back in the real world. Oh well.

uptownsoul454d ago (Edited 454d ago )

Xbox Expects Holiday Gaming Revenue Drop YoY Due to Generation End…

Didn't Xbox same a similar thing last quarter…Correct me if I'm wrong, but I think the last time they called it "Generation fatigue". And that last time saw the other two consoles have growth (again, if I'm not mistaken)

Kumakai454d ago (Edited 454d ago )

It corresponds with the generation being close to done as people slow down when they know a new console is coming. Also evidenced by the fact that services remain unchanged or higher. Same thing with ps4 as stated here as fact even tho the fanboys will all disagree. Nice spin tho.

https://www.techspot.com/ne...

454d ago
rainslacker454d ago

Would be kind of embarrassing for MS if they claim that holiday revenue is going down because of next gen looming, and Sony ends up having steady YOY revenue or an actual increase. Not really sure what I'd expect, but I think that people that waited this long to get a console may not be the one's that are waiting for a next gen console which is likely to cost significantly more. A good price drop on both the Pro and OGPS4 could drive sales, and there are some good games throughout the rest of the year.

If a new gen looming means that sales drop a lot, it makes one question why companies would announce them so early. It's like announcing a price drop 6 months in advance, knowing that people would just wait it out if it was a lot.

+ Show (1) more replyLast reply 454d ago
darthv72454d ago (Edited 454d ago )

7% doesnt seem like much of a drop. Not when you figure they increased by 44% same time last year. ( https://n4g.com/news/221336...

So it isnt like this drop is anything close to doom and gloom. Ebbs and flows... ebbs and flows

bluefox755454d ago (Edited 454d ago )

I'd say quite the opposite. If you're company has a 7% drop when they have a 44% increase the year before, that's a pretty big downgrade. Growth is important. Ebbs and flows are fine on an industry scale, but when all of your competition is flowing and you're ebbing....

Atom666454d ago

@Bluefox

Or your YOY is made in comparison to an unusually high quarter last year.

Had it not been bolstered by the X last year, you'd probably see a more gradual gain this year. In addition to selling less hardware generally at this point, it's also selling for less $$. They received an uncharacteristic boost with the intro of the higher priced mid gen refresh. In years past, a slim or new model wouldn't provide that kind of revenue boost.

If it had dropped to their (poor) numbers from the prior year, then maybe I'd say it's worth talking about. As it stands, the numbers seem OK by most standards.

Nintendo is still trending upwards because Switch is in its prime. Sony was down YOY at its last quarterly report, and I suspect that it will be down again.

The nature of the console business makes it pretty difficult to see perpetual growth like you suggest. Sony and MS seem to be doing a good job of ensuring they at least maintain at a good level while the generation winds down, though.

rainslacker454d ago

Single quarters in the console market, or just publishing market, are often not really a great indicator of what's going on. Yearly reports, and maybe the holiday reports are often a better barometer for the way things are trending. A single quarter can easily be different than the same one prior, but generally, a year has about the same output, and system sales tend to follow the software releases. dont' think MS had any major releases for the quarter in question here...ended Sep 1st I believe.

I don't think a 7% drop is the end of them, even if all things were equal. If it was consistently down 7%, then one would have to look more into why it's on the decline.

The quarter that comes with Gears 5 release will be one to watch more. they claimed 3 million players, which should indicate a decent increase in sales, but Game Pass throws a wrench in the normal way revenue is made. For instance, XBLG will probably see a surge in revenue for the holiday season as many people also sign up for the service. But, then for the rest of the year, they aren't making any where near as much revenue. With all the Game Pass subs, like a month for free, one would expect a surge in game pass revenue a month after the free trials from new console sales. But, they apparently got a lot of cheap subs with people signing up for 2-3 years, which some did because it exteded their game pass sub that long....and that revenue would have fallen within this quarterly report. On the flip side though, those people won't have to pay for these services for the next 1-3 years, which could mean a bigger drop in services come next year, even though it was cited as relatively the same this year.

Kribwalker454d ago

@bluefox
it’s less sales of consoles and the decline of fortnite. It’s literally in their report. Their games and services revenue even went up 1% despite the decline of fortnite money (that’s what drove record revenue last year) but hardware is down. If fortnite was still raking in the cash there would have been no decline at all

+ Show (2) more repliesLast reply 454d ago
Kumakai454d ago

It’s called end of the generation decline. Same thing is happening with ps4 but you won’t see that article on n4g... you can look it up pretty easily tho. Here I’ll help:

https://www.techspot.com/ne...

rainslacker454d ago

I'm pretty sure if Sony reports a YOY decline, we'd see the report here, and some people wouldn't be that kind about it. Some will cite how all those nasty Sony fans were saying it was a bad thing for MS on an article like this, while all the Sony fans will say how all the nasty Xbox fans were in this article saying it was generational decline. It'd go on like that until the next report comes out, and it gets flipped around again.

Goes on all gen, every gen, and I suspect it'll continue next gen.

MasterCornholio454d ago

There's a pretty big difference between Sonys dip and Microsoft's. Overall the PS4 is still selling extremely well while the Xbox One pales in comparison. And this is taking into account the fact that next gen systems have been announced btw.

ApocalypseShadow455d ago (Edited 455d ago )

Record breaking player amounts is easy to achieve when you're giving away the top games in a service for a $1. That's not impressive. That's foolhardy. Would they say the same if each of their 1st party games sold 15-20 million copies each at retail and digital? Nope.

I also think sales was reducing already for them with their strategy of playing everywhere else but the Xbox console. Play on PC. Play on your phone. Play from the Cloud. Play our ports on Switch.

Generation End has barely anything to do with their continued downturn in sales in favor of services and subscriptions. It's self inflicted.

ElementX455d ago (Edited 455d ago )

You are paying for $60/year for Live and upgrading for $1. This is about Live users, not Game Pass, which you are taking about

darthv72455d ago

I havent done it yet but does that $1 convert the year or just the month? My gold is set to renew in November and i was considering getting the GP promo for $1.

ElementX455d ago (Edited 455d ago )

The life of your subscription, up to a few years or something. I refuse to use game pass. If you are a true gamer, support the developers so they can keep making games. They get money, true, however they get more from purchases. Indie devs often don't make much money so game pass gives them a little something instead of people just not buying their game

Xb1ps4455d ago

So did you buy every game that released to date?

rainslacker455d ago

You need to have an XBL account to sign up for game pass. You don't need to be a gold member to get game pass, or to use game pass on PC. Makes sense that those numbers would go up when it's so cheap to try. Hell, I buy a lot of crap because it's only a dollar at Gollar General.

But, if you look at the other article on the subject, they said the services and content revenue is relatively unchanged, so while they may have gotten a lot of subs, at $1, they aren't making more money from it.

ElementX455d ago

@xb1ps4 what kind of question is that? If the developers make good games I support them with a purchase.

BizarroUltraman454d ago (Edited 454d ago )

So are you saying I'm not supporting the developer by playing on Gamepass? Either way you go, the developers are getting theirs. You just worry about having you $60. I'll play the games I want on Gamepass and buy the ones that are not in the service. Stop acting like you're doing anyone any favors with your bullshit propaganda.

MasterCornholio454d ago (Edited 454d ago )

@Bizarro

It's true the developer gets something expecially if you buy DLC from them. But they certainly are not getting anywhere near what they would get from a physical copy. Well that's unless you play their game for several months and nothing else on gamepass.

If you truly want to support a developer I'm pretty sure they would be pretty happy with you buying their game.

+ Show (4) more repliesLast reply 454d ago
Automatic79455d ago

I love these arm chair analyst. Always show up on an Xbox article.

Ricegum455d ago

Same with Sony articles too.

rdgneoz3455d ago

Though Sony (and Nintendo) actually release sales figures and units sold through to customers...

NeoGamer232455d ago

@rdgneoz3
So, how does sales figures tell you anything about success?

The same person can buy more then one console. If a game is on GamePass you are not going to get high game sales probably, And there are a lot of people that buy a console and only 1 or 2 games ever.

Counting consoles is archaic. Especially in the next generation where streaming gaming will become a piece of the picture. I don't totally discount the number, but it says nothing about re-buys, multiple console purchases from one person, and just because i have a console doesn't mean i buy a bunch of games. Look at the Wii. Sold 100 million consoles, PS3 was about 85 million but outsold Wii in games.

And who cares about game sales if you have tied your users to a game subscription service like gamepass? That is like comparing sales of blu-ray movies to netflix subscriptions. They are different business models and we all know which model won on music, movies, and probably next.... Games.

rainslacker455d ago (Edited 455d ago )

I love those that can't offer any counter to these armchair analyst, and the best they can do is try and discredit them by saying they're armchair analysts. Always fun to see who can't form any kind of discussion about the topic at hand.

If these armchair analysts are so easy to discredit, why not do that instead of trying to avoid the discussion? If you're not interested in the discussion, why try to be part of it....unless your goal is to antagonize others.

Wasabi455d ago (Edited 455d ago )

@rainslacker

"services and content revenue is relatively unchanged, so while they may have gotten a lot of subs, at $1, they aren't making more money from it"

That's incorrect.

YoY service and content revenue may be flat overall but this is due to a large decrease in revenue from third party titles YoY , primarily due to a slump in popularity of Fortnite.

Digital game sales and both Live and Gamepass revenue are UP YoY making the fact that despite revenue loss from Fortnite Xbox managed to break even all the more impressive.

Console sales are down but was expected as we near the end of this generation.

It's all here for when you inevitably try to dispute.

https://mobile.twitter.com/...

rainslacker455d ago (Edited 455d ago )

Yeah, leave out the rest of the comment which states that people are spending less money on games, which MS said the opposite was happening, and that people were buying more games that happen to be on game pass. But, there is a direct correlation between people buying those games, and not others, or they aren't spending money on other games which aren't on game pass. Maybe people are buying more digitally for games that are on Game Pass, but the data isn't complete, and the numbers here don't paint a picture that can quell the question of if game sales are actually up.

They combined the services and digital sales numbers to make their case, but don't specifically say that all games sales are up. Maybe digital sales are up, but what about physical....which still makes up more than 70% of the games market. Live sales being up makes sense considering all the bundled deals they have attached to Game Pass with XBL subs. How many people subbed for three years just to get Game Pass for a few bucks. So many people on here said they did just that.

Yeah, the information is all there to see, but doesn't mean that the information is what you're saying it is. MS is very careful in how they release their data, and there is always room for interpretation. They also cite Minecraft as being a money maker in their report.

I read the data before I questioned it.

@Obscure below

I get that. But, there are actual arguments being made, but the person I made that comment to decided to move off topic to dismiss the postulation as being done by clueless people. Yes, those people may be clueless, they may be wrong. Same as me, I dunno because MS doesn't give enough info. But my postulation is about as valid as those that say the opposite without much more to go on based on the same data.

But, isn't it better to say why these people are wrong, instead of just saying they're wrong because they're armchair analysts? Wouldn't that actually make it seem like that person has a clue, and maybe providing a path forward for more discussion? How does one argue that they have a point when someone tries to change the topic around to the people discussing it being wrong with no reason why they're wrong?

Now, I know you and I often disagree, but you make a counter argument about why the numbers are down....one that MS cites themselves. That's fine. But the comment you're responding to had nothing to do with that....although I had a comment above that did address that, but you decided to instead focus in on the topic of if I'm, or these armchair analysts are credible enough to make an argument.

I have this discussion with Gangsta all the time because he always tries to do this. Stop trying to discredit the person, and just discredit the argument. It's not that hard if you have a valid argument based in logic, and you may be right, you may be wrong, but at least it makes sense. Stop making it personal, and it becomes an actual discussion.....regardless of if it's done by two ignorant parties.

The article title is never enough. Should we just go by the title on the other article about this topic where they just say they're down 7% YOY? There's more to it, and if there is nothing to discuss, why is it news?

Unlike many on here, I can be made to change my opinion on something. It won't happen with arguments like, "Oh look, an armchair analyst".

Obscure_Observer455d ago (Edited 455d ago )

@rainslacker

"I love those that can't offer any counter to these armchair analyst, and the best they can do is try and discredit them by saying they're armchair analysts."

Because that´s what they are! It´s the end of generation! There´s no need of a counter argument. The article´s tittle should be enough.

I wonder what would be your excuse when/if Sony reports losses on their YoY report even after TLOU 2 and Death Stranding releases!

Let´s wait.

Wasabi455d ago

@rainslacker

"I read the data before I questioned it"

Then you obviously didn't understand it, or you would not have said this;

"while they may have gotten a lot of subs, at $1, they aren't making more money from it"

Because this statement is incorrect.

MasterCornholio454d ago (Edited 454d ago )

@Obscure

"Because that´s what they are! It´s the end of generation! "

Same for Sony but their numbers are alot higher. I guess that's a fair comparison.

I prefer to look at actual sales rather than a percentage change. It's paints a more realistic picture that way.

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TKCMuzzer455d ago

No offence but MS blur the figures, this is only going to attract analysts. They could however realise figures that matter and there would be no need for people to over analyse anything.

Lon3wolf454d ago

Indeed they do not help them selves not releasing anything figure wise.

TheColbertinator455d ago

Best entertainment services are only available with Xbox One X. We must thank God our children will play truly unparalleled gamings experience provided solely by the geniuses at Microsoft Games Studios. Make the right choice and pick up an Xbox One X today.

xRacer74x454d ago

Love my Xbox X and XBox Live. XBOX Live is so superior to any other console online.

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